Two fifths (44%) saw investing in buy-to-let as more complicated than six months ago, as less than a third (31%) reckoned now is a good time to buy.
Landlords predicted rent rises to slow to 1.4% over the next year. This would be a significant slowdown from current levels, as rents rose by 7.5% in London and 3.5% outside according to the latest Homelet Rental Index.
Demand looks as strong as ever however, as over half (52%) of landlords saw increased tenant demand in the last six months, while more than a third (35%) said they raised rents due to strong tenant demand for each available property.
Adrian Gill, director of Your Move and Reeds Rains, said: “Landlords could be forgiven for feeling a little deflated at the moment and its worrying to see this may motivate many to reconsider their investment.
“The government’s tax changes appear to be making investing in buy-to-let less attractive because of the seemingly smaller profits margins on offer in the future. If a 10th of landlords do decide to leave the industry, this would seriously shrink the number of properties available for tenants.
“At a time when tenant demand is only rising, shorter supply will only translate into increased rents. This may mean landlords are underestimating the likely pace of future rent rises.
“The government need to cut the red-tape involved in providing homes for renters if they hope to maintain a healthy supply of rental properties. With the Bank of England keeping a wary eye on the buy-to-let market, further regulatory interference may only make landlords’ and tenants’ lives harder. We need landlords to stay in the market and invest further in the sector, in order to match future demand.”
